I spend a lot of time thinking about business ownership in America because it is one of the clearest ways families build lasting, generational wealth, on top of being the backbone of the American economy. But as a financial advisor, what particularly intrigues me is how they change hands. Are they sold, are they inherited, or are they simply shuttered? Can a buyer be easily found? And for the parties involved, how is their financial life affected after selling (or buying) a business? And what does the business landscape look like as we transition to the second half of the decade?
The volume alone creates pressure, because even a small shift in the share of owners who decide it is time to transition can translate into hundreds of thousands of potential exits.
The country has a very large base of operating businesses, and, frankly, the ownership profile is aging. In 2023, there were 36.4 million businesses in total, including 5.9 million employer firms, meaning businesses with paid employees beyond the owner, and 30.4 million nonemployer businesses, meaning businesses with no paid employees.
There is a significant difference between a business that exists and one that can be transferred cleanly at fair value on a timeline the owner can live with.
The Great Ownership Transfer
A large portion of owners are in or approaching retirement age. Recent data shows that 51 percent of owners in employer businesses were age 55 or older. On the infrastructure side, the pathways for transferring ownership at scale are uneven, especially for smaller firms.
By 2035, about six million small and medium-sized businesses are expected to face ownership transitions as baby boomers retire, and more than one million of them are viable candidates for sale or employee ownership, representing up to potential $5 trillion in enterprise value. Those are impressive numbers! There is also a practical reality that many business owners already recognize: the systems for transferring ownership are fragmented and underdeveloped, and exits often end in closure rather than a transfer.
When you put that next to the 5.9 million employer firms in the country, the message is clear: the potential supply of businesses seeking an exit over the next decade is comparable to the size of the entire employer-firm universe.
Ultimately, the market is likely to remain crowded, which means buyers can be more selective, and businesses that look easiest to finance and operate without the founder are likely to rise to the top of the stack. Over the next decade, business selling activity is expected to surge as more owners reach the point where transition becomes unavoidable. In a crowded market, the most attractive businesses are likely to move first: the ones that are easiest to understand, easiest to finance, and easiest to operate without the founder.
Recent transaction data helps sharpen that point. In 2025, overall small business transactions were essentially flat, while sale prices rose modestly. That is not the profile of a distressed market or an overheated one. It is the profile of a market where quality still commands attention, but buyers remain disciplined.
The Demand for Businesses Without a Succession Plan
Demand exists, but it’s segmented. Recent transaction data also shows increased buyer activity from multiple directions, including private equity firms, search-fund-style buyers, and mid-career professionals leaving traditional employment to acquire businesses. The buyer landscape includes institutional, independent, and community-based buyers, and demand is constrained by deal size, geography, and buyer readiness. A business can be “a great business” and still operate in a part of the market with a thin buyer pool.
The harshest mismatch shows up in what can be called micro and emerging middle-market businesses, many of which are valued at under $2 million. Estimates suggest that nearly 80 percent of projected exits will occur among micro and emerging middle-market firms, where acquisition markets are weakest, and many viable companies remain invisible to potential buyers. This is also where family-owned businesses often live, especially when the company has been run tightly around the founding owner.
Buyers usually focus on these three issues first.
The first issue is continuity of cash flow. If revenue depends on the owner’s personal production, personal relationships, or informal pricing decisions, the risk premium rises immediately.
The second issue is continuity of operations. If a buyer cannot see how work moves through the business, how quality is controlled, and how key roles are backfilled, the business can be difficult to underwrite even when profits look good.
The third issue is continuity of leadership. A business that requires the founder’s daily judgment to function can be far less transferable than the income statement suggests. This is one reason the Great Ownership Transfer discussion keeps circling back to a core theme: closures dominate not because businesses lack value, but because pathways to transfer are limited, opaque, or costly.
What Kinds of Businesses Are for Sale?
Most of the businesses coming to market over the next decade are not large, institutional-scale companies. A significant portion sits in the small and emerging middle market, especially businesses valued between roughly $500,000 and $2 million. These include small medical and dental practices, construction trades, HVAC companies, and franchises. These firms often have stable cash flow and strong local ties, but many still struggle to reach the right buyers or attract financing.
As business size increases, the mix shifts toward lower middle-market companies, including regional manufacturers, logistics providers, B2B service firms, and healthcare practices. Recent market data also shows that the service sector was the strongest performer in 2025, with transaction volume up 4 percent, median sale price up 5 percent to $340,000, and the average cash flow multiple up 2 percent to 2.52.
Within service businesses, financial services transactions rose 38 percent, technology services rose 12 percent, and architectural and engineering firms rose 17 percent. These businesses are more likely to attract independent sponsors, search funds, and other buyers because they tend to have stronger reporting, clearer processes, and more transferable operations than owner-centered micro businesses.
Who Is Buying?
The buyer pool includes private equity firms, independent buyers, search-fund-style acquirers, and community-based buyers such as employees or family successors. Recent transaction data shows that 44 percent of brokers reported increased private equity activity, while 43 percent reported increased activity from business-school-trained buyers, including search-fund-style buyers.
BizBuySell also reports that 44 percent of buyers now identify as mid-career professionals leaving traditional employment to acquire a business, which helps explain why the market has seen greater interest from buyers seeking cash flow, autonomy, and a business they can step into with confidence. The same report also includes broker commentary describing younger, first-time buyers in their 30s and 40s who are using SBA loans to leave corporate life and buy businesses, adding another layer to the current buyer profile.
In Conclusion
A business sale could be the largest liquidity event in your life, but what follows is the long arc: how proceeds are invested, how risk is managed, and how wealth is positioned to support the next generation without unnecessary friction. A strong transaction can create options. A poorly coordinated one can leave value on the table in taxes, transition risk, and long-term planning mistakes that are much harder to unwind once the deal is done.
If you’re approaching a potential transition, let’s review your financial, business, and retirement plans together and identify the gaps that matter most before the sale process begins. The earlier those pieces are brought into alignment, the easier it becomes to evaluate the sale in the context of your broader wealth, retirement income, and legacy goals.
